Merck Sues US in Fight Against Drug Price Negotiation

Merck & Co sued the US government on Tuesday, seeking an injunction against the drug price-trading program contained in the Inflation Reduction Act (IRA), which it says violates the Fifth and First Amendments of the Constitution.

It is the first attempt by a drugmaker to challenge the law, which the pharmaceutical industry says will mean lost profits that will force them to halt the development of innovative treatments.

The Joe Biden administration’s drug pricing reform aims to save $25 billion a year by 2031 by negotiating prices to Medicare.

The lawsuit, filed in Columbia District Court, alleges that under the law, pharmaceutical companies would be forced to negotiate the prices of drugs in the government’s Medicare health insurance program below market prices.

Merck he claims this violates the part of the Fifth Amendment that requires the government to pay just compensation for private property taken for public use.

After the government released its price negotiation roadmap in March, industry lobbyists and lawyers told Reuters drugmakers were likely to file lawsuits arguing the government is failing to comply with the Constitution of USA.

“The IRA uses stiff penalties to seize drugs while refusing to pay their fair value, then coerces manufacturers to smile, play along and pretend it’s all part of a voluntary ‘fair’ exchangeMerck said.

The drugmaker also argues that the law will force companies to sign agreements admitting prices are fair, which it says is a violation of First Amendment protections for free speech.

Merck filed its lawsuit against the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS), as well as the Secretary of HHS, Xavier Becerra, and CMS administrator Chiquita Brooks-LaSure. HHS and CMS were not immediately available for comment.

Source: Reuters